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ACCT 301 – Intermediate Accounting | A+ Graded
Exam Material (2025/2026)
The method of inventory usually provides a better match of expenses with
revenues
a-LIFO
b-FIFO
a-Weighted Average
d- all of the above - SOLUTION=LIFO
A company's market value is generally less than its book value
TRUE
FALSE - SOLUTION=false
what is the effect of the adjusting journal entry to write down inventory to its net
realizable value?
a-Decrease net income.
b-Decrease total assets.
c-Decrease total assets and net income.
d-Increase retained earnings. - SOLUTION=Decrease total assets and net income.
when a seller offers a right of return, which is true:
a-sales are net of estimated returns
b-sales are gross returns, returns are expenses
c-sales are net of actual returns
d-sales are gross of returns, returns are ignored - SOLUTION=sales are net of
estimated returns
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which financial statement shows information for a point in time ONLY?
a-balance sheet
b-income statement
c- statement of cash flows
d-statement of shareholders equity - SOLUTION=balance sheet
A company receiving a donated will record a(n):
a- increase in liabilities
b-increase in revenue
c-decrease in assets
d-decrease in liabilities - SOLUTION=an increase in revenue
Collections of accounts receivable that previously have been written off result in an
increase in cash and an increase in:
a- accounts receivable
b- bad debt expense
c-allowance for uncollectible accounts
d- retained earnings - SOLUTION=Allowance for uncollectible accounts
Jo paid $840 to Tot co. for a 6 month course that started on June 1. As of August 1,
the financial records would show:
a-$560 Revenue; $280 Accounts Receivable
b-$560 revenue; $280 Deferred Revenue
c-$280 Revenue; $560 Accounts Receivable
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d-$280 Revenue; $280 Deferred Revenue - SOLUTION=280 Revenue; $280
Deferred Revenue
when FASB issues new accounting standards, they call them:
a-Financial Technical Bulletins
b-Financial Accounting Standards
c-Accounting Standards Updates
d-Accounting Research Bulletins - SOLUTION=Accounting Standards Updates
Which of the following is recorded by a credit to accounts receivable?
a-write off of bad debts
b-sale of inventory on account
c-estimating the annual allowance for uncollectible accounts
d-estimating annual sales returns - SOLUTION=write off of bad debts
operating cash outflows would include:
a-Purchases of inventory
b-Purchases of equipment
c-payments of cash dividends
d-Purchase of investments - SOLUTION=Purchases of inventory
When selling PP&E for cash, the seller recognizes:
a-The seller recognizes a gain or loss for the difference between cash received and
the fair value of the asset sold
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b-The seller recognizes a gain or loss for the difference between cash received and
the book value of the asset sold
c-The seller recognizes losses, but not gains
d-None of these choices are correct - SOLUTION=The seller recognizes a gain or
loss for the difference between cash received and the book value of the asset sold
The exclusion right to use a company's name and sell its product within a specified
geographic area is called:
a-trademark
b-copyright
c-franchise - SOLUTION=franchise
The practice of using the lower cost or market to value inventory reflects what
accounting principle?
a-matching principle
b-revenue recognition
c-conservatism
d-Materiality - SOLUTION=Conservatism
This is the fair value of consideration given in excess of the fair value of the
identifiable net assets:
a- earnings quality
b-amortization
c-depreciation
d-goodwill - SOLUTION=goodwill
ACCT 301 – Intermediate Accounting | A+ Graded
Exam Material (2025/2026)
The method of inventory usually provides a better match of expenses with
revenues
a-LIFO
b-FIFO
a-Weighted Average
d- all of the above - SOLUTION=LIFO
A company's market value is generally less than its book value
TRUE
FALSE - SOLUTION=false
what is the effect of the adjusting journal entry to write down inventory to its net
realizable value?
a-Decrease net income.
b-Decrease total assets.
c-Decrease total assets and net income.
d-Increase retained earnings. - SOLUTION=Decrease total assets and net income.
when a seller offers a right of return, which is true:
a-sales are net of estimated returns
b-sales are gross returns, returns are expenses
c-sales are net of actual returns
d-sales are gross of returns, returns are ignored - SOLUTION=sales are net of
estimated returns
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which financial statement shows information for a point in time ONLY?
a-balance sheet
b-income statement
c- statement of cash flows
d-statement of shareholders equity - SOLUTION=balance sheet
A company receiving a donated will record a(n):
a- increase in liabilities
b-increase in revenue
c-decrease in assets
d-decrease in liabilities - SOLUTION=an increase in revenue
Collections of accounts receivable that previously have been written off result in an
increase in cash and an increase in:
a- accounts receivable
b- bad debt expense
c-allowance for uncollectible accounts
d- retained earnings - SOLUTION=Allowance for uncollectible accounts
Jo paid $840 to Tot co. for a 6 month course that started on June 1. As of August 1,
the financial records would show:
a-$560 Revenue; $280 Accounts Receivable
b-$560 revenue; $280 Deferred Revenue
c-$280 Revenue; $560 Accounts Receivable
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d-$280 Revenue; $280 Deferred Revenue - SOLUTION=280 Revenue; $280
Deferred Revenue
when FASB issues new accounting standards, they call them:
a-Financial Technical Bulletins
b-Financial Accounting Standards
c-Accounting Standards Updates
d-Accounting Research Bulletins - SOLUTION=Accounting Standards Updates
Which of the following is recorded by a credit to accounts receivable?
a-write off of bad debts
b-sale of inventory on account
c-estimating the annual allowance for uncollectible accounts
d-estimating annual sales returns - SOLUTION=write off of bad debts
operating cash outflows would include:
a-Purchases of inventory
b-Purchases of equipment
c-payments of cash dividends
d-Purchase of investments - SOLUTION=Purchases of inventory
When selling PP&E for cash, the seller recognizes:
a-The seller recognizes a gain or loss for the difference between cash received and
the fair value of the asset sold
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b-The seller recognizes a gain or loss for the difference between cash received and
the book value of the asset sold
c-The seller recognizes losses, but not gains
d-None of these choices are correct - SOLUTION=The seller recognizes a gain or
loss for the difference between cash received and the book value of the asset sold
The exclusion right to use a company's name and sell its product within a specified
geographic area is called:
a-trademark
b-copyright
c-franchise - SOLUTION=franchise
The practice of using the lower cost or market to value inventory reflects what
accounting principle?
a-matching principle
b-revenue recognition
c-conservatism
d-Materiality - SOLUTION=Conservatism
This is the fair value of consideration given in excess of the fair value of the
identifiable net assets:
a- earnings quality
b-amortization
c-depreciation
d-goodwill - SOLUTION=goodwill
